Getting a Legitimate Lender and Getting

Pre-Approved

It used to be that buyers could go house shopping and when they have found

their dream home, then they go to get pre-approved. However, in today's

market, that has proven to be one of the least effective methods in landing the

dream home.

Most lenders can pre-qualify you for a mortgage over the phone. Based on

general questions about your income, debt, assets, and credit history,

lenders can estimate how much mortgage you qualify for. However, being

pre-qualified and pre-approved are different things. Pre-approval means that

you have applied for a mortgage; you have filled out the mortgage application,

received your credit report, and verified your employment, assets, etc. When

you are pre-approved, you know exactly what the maximum loan amount will

be.

A pre-qualified letter is not verified and in essence, does not count for much if

you are competing with other buyers who are pre-approved. When you are

pre-approved, you and the seller know exactly how much house you can

afford. It gives you credibility as an interested buyer and lets the seller know

immediately that you will qualify for a loan to buy their property.

In addition to being pre-approved, it's important to be pre-approved with a

legitimate lender. Legitimate lenders include: banks, mortgage bankers,

credit unions, savings and loan associations, mortgage brokers, and online

lenders.

Some lenders to avoid: those who lose a form or misplace a file, those who

gather information from you in an unorganized manner, those who are not

informed about interest rates, points or costs, and those who cannot provide

you with the right information.